- 2 Jun 2021
It’s impossible to overstate the devastating impact that the past 14 months have had on every aspect of our lives - the pandemic has shaken our society and economy to their core.
And whilst our collective efforts, in tandem with the success of the vaccination programme, have been instrumental in suppressing the virus, our fight to overcome it continues.
I emphasise that it has been our fight – a shared fight. The pandemic has affected everybody. And today, in my first speech as the Cabinet Secretary for the Economy I want to thank businesses and workers for their sacrifices. Their livelihoods have been on the line for over a year. The essential restrictions have saved lives, but not without cost.
The Government owes a great debt of gratitude to everybody who put the needs of the country ahead of their own financial or business interests and I would like to thank them.
I also want to pay tribute to Fiona Hyslop and Fergus Ewing. Both worked night and day to represent the interests of Scottish workers and businesses. Over the last year, I watched both of them up close as they met with Scottish businesses on an almost hourly basis, listening to and acting upon their worries and fears. I’d like to put on record my thanks and recognition of them.
Scotland’s recent economic performance quantifies the collective sacrifices of the nation’s businesses and workers.
While the Scottish economy grew by 2.1% in March, the economy remains 5.4% below the level of February 2020.
And while the latest output figures indicate that we are taking tentative steps towards recovery, some sectors have clearly been hit harder than others, and businesses continue to face considerable challenges as we emerge from lockdown. For example, the output from our accommodation and food sectors remains 70% below its pre-pandemic level.
There are glimmers of hope however, with latest survey data showing around 74% of businesses in the accommodation and food sector trading in mid-May, up from around 34% at the end of April.
With Scotland’s unemployment rate at 4.3%, and the UK’s at 4.8% it is clear that our labour market continues to depend in part on the furlough scheme, which was still supporting 325,000 Scottish jobs in March.
Much has been said about economic recovery in recent weeks; but the challenge is stark, and in my first speech I want to clearly outline our vision for Scotland’s economy and the steps we are taking.
Before I do, I want to speak to the many businesses who are still focused on survival.
Getting businesses open safely and back to full profitability is crucial and work is ongoing looking at how we move to more normality later in the summer or earlier in the autumn.
Supporting businesses has been and will continue to be a focus for this government - businesses in Scotland have directly benefitted from £3.6 billion in support – more than a third of total COVID-19 funding.
We are also the only country in the UK to provide 100% non-domestic rates relief for all retail, leisure, aviation and hospitality premises all year, reducing businesses’ cost base so they can invest in restarting.
So, we will continue to listen to businesses to understand their challenges and how best to support them.
That is why we have allocated up to an additional £40 million for the culture sector, including £25 million for a further round of funding for businesses who previously received support from the Performing Arts Venues Relief Fund and the Culture Organisations and Venues Recovery Fund for businesses who were eligible but did not receive funding originally. These funds are again being administered by Creative Scotland and will be launched soon.
We have also allocated up to £62 million for taxi drivers and operators, bringing the total support for the taxi sector during the pandemic to more than £90 million.
All drivers who previously received a £1,500 grant under the Taxi and Private Hire Driver Support Fund will receive a second payment this month. Taxi operators will then be contacted by their local authorities and receive tiered grants taking their total support up to £10,000.
Following discussions with sector representatives a small number of the very largest operators will now be paid up to £15,000. And we will work with the sector to explore the potential for additional support for the booking offices which are such an important part of the sector.
Later today we will publish details of up to £12 million of support being provided to businesses in the local authorities that will not move from Level 2, as announced yesterday by the First Minister. In short, businesses who were expecting to open or see reduced restrictions as a result of moving to Level 1 but will now remain in Level 2 will receive weekly support similar to the Strategic Framework Business Fund. There will also be additional discretionary funding.
I very much hope, Presiding Officer, as the First Minister said yesterday, one day soon all the restrictions will be a thing of the past. With such freedom, comes the opportunity to restore and rebuild our economy.
Our mission as a Government is this: to create the best conditions for entrepreneurs to seize the opportunities to produce, to invent, to scale up, and in so doing, create secure and satisfying jobs which pay a fair wage. That is the foundation stone of our society – getting that right will combat poverty, will lead to better health and social outcomes and will generate the public revenue to invest in the best public services.
Therefore, it matters what kind of economy we rebuild. Putting wellbeing at its heart is not just morally the right thing to do - it unlocks creativity and confidence which in turn helps our businesses to innovate and grow, making them more globally competitive.
And to achieve that we need to have a resilient, innovative and growing business base. That is why this government is absolutely committed to being pro-prosperity, pro-growth, and pro-business – a true champion for our job creators.
To that end, in the first six months of this parliament we will deliver a new 10 year National Strategy for Economic Transformation, setting out the steps to create the best conditions for entrepreneurship to flourish.
We recognise the crucial role that industry leaders, businesses, trade unions, economists and other stakeholders will play in shaping and guiding that strategy so, as set out in our ‘100 days plan’, we will establish a new Council for Economic Transformation to draw on their experience and expertise.
And we will go further - pioneers and entrepreneurs will be the bedrock of this transformation, and we will deliver a National Challenge competition, providing funding of up to £50 million to the project or projects with the greatest potential to transform Scotland.
Harnessing all of our collective talents and strengths brings me to perhaps the most important part of my speech. I want to issue an open invitation to anybody who wants to play their part in rebuilding our country. Join us in leading that economic recovery. Our vision is nothing short of economic transformation - this has to be a national endeavour. Wherever you work, and in whatever capacity, if you think you can serve our country as we face the prospect of rebuilding, then this is your personal invitation.
Our strength is our united vision to work together – across party lines, across sectors and across regions – to rebuild. We must unashamedly use the experience, the expertise and the ingenuity of government, businesses, trades unions and the workforce to deliver greater, greener and fairer prosperity.
I welcome the new opposition spokespeople to their roles. There will rightly be the opportunity for scrutiny, I accept that and I welcome that but I also hope there will be the opportunity for constructive sharing of suggestions and ideas.
Presiding Officer, this is an official invitation to the entrepreneurs and the thinkers, the job creators and the hard workers: we need you, work with us to make Scotland thrive.
Let me now turn to some of the specific actions we will take to deliver our vision.
We know that the transition to net zero is one of Scotland’s greatest economic opportunities.
Pursuing a green recovery will accelerate that transition, to make sure that we are investing in a sustainable future. COP26, hosted in Glasgow this November, is a once in a generation opportunity to put the transition to net zero at the heart of all that we do.
It is essential that this transition is just – which means that, as we reduce our emissions and respond to a changing climate, the journey is fair and creates better opportunities for everybody – regardless of where they live, what they do, and who they are.
And for sectors like oil and gas – we will work with you , we will work with you to ensure that you and your employees are part of that transition.
Helping Scottish businesses to develop these new products and services is key to capturing the economic value from our low carbon investments – pioneered in Scotland, then exported to the world.
Supporting the internationalisation of our business base is one of the most effective tools that we have.
We know that for a successful recovery, we must ensure that no one is left behind and that’s why we are focussing heavily on employability and skills – making sure that our workforce is trained and ready to take on the jobs of the future.
This year we will invest more than £1bn to drive forward our National Mission for Jobs and to equip our workforce with the future skills they need, with an additional £500 million over this parliament to support new jobs and reskill people.
While no one has been left untouched by this pandemic, there is no doubt that younger people have already paid a heavy price and we cannot and will not allow this to affect their life chances going forward, that is why we have been working with employers and young people to deliver the Young Person’s Guarantee.
But just getting people into work isn’t good enough – or retaining jobs - the guiding principles of Fair Work are central to that economic recovery and they must be a hallmark of our wellbeing economy.
To make this a reality we will work with employers to ensure that those already facing barriers to the labour market – including disabled, minority ethnic people and women – are supported to contribute to our recovery.
The £20 million Rural Entrepreneur Fund will be key and will help to re-position the rural economy, placing it at the forefront of Scotland’s green recovery .
Presiding Officer, as well as investing in businesses to thrive, investing in improving the communities in which we all live will also pay dividends.
We will continue to work with our tourism sector which provides significant numbers of jobs and economic benefit for the whole country. The recovery work is being guided by the national tourism strategy, with the aim of getting the sector back on track to being a 21st century leader in sustainable tourism.
Presiding Officer, I also want to reference the fact that digital technologies will of course remain at the forefront of growth. I have committed to reopening the DigitalBoost Fund – backed by £25m – to provide technology support and training for small and medium sized business in the first 100 days of this Government.
Presiding Officer, as I draw to a close, the actions we take today will shape our economic recovery for the next decade and beyond. These are challenging times. But with those challenges come opportunities to reshape our economy, making it more resilient, more sustainable and more prosperous. It’s undoubtedly a challenge but I want to work in partnership with anybody else who shares our vision to see Scotland flourish.